Private Wealth: U.S. Up, Asia Down

By Christiana Cefalu

With pockets of strength and weakness popping up in divergent economies around the globe this last year, it’s a daunting task to measure the ebb and flow of fortunes among the globe’s rich. But Singapore-based research firm Wealth-X claims to have insights into the net worth of the wealthy — and how the dismal headlines ultimately shook up the wealth map this past year.

The research firm’s World Ultra Wealth Report compiles data on ultra high net worth (UHNW) individuals, defined as having a net worth of $30 million or more. (To compare its figures with other studies, check out the World Wealth Report 2012 by Capgemini and RBC Wealth Management.

According to Wealth-X’s calculations, the global UHNW population has now reached 187,380 individuals, representing a combined wealth of $25.8 trillion, which is roughly double the U.S.’s GDP. From a year ago, the population in this extremely rich subset increased 0.6%. Pretty good, but their wealth actually decreased 1.8% overall, largely driven by the crisis in the Eurozone and the slowdown in emerging economies.

Courtesy of Wealth-X

Or so says the report’s authors. By region, Oceania, defined as Australia, New Zealand and ancillary islands, saw the highest percentage of growth in its UHNW population, up an impressive 5.9%. The Oceania group’s combined wealth in dollars was also up a healthy 4.4%. Wealth-X president David Friedman attributed this to a boom in Australia’s mining industry.

But, conversely, the largest percentage loss of the UHNW population took place in Asia, which lost 2.1% of its wealthiest individuals. The report’s authors blame the set-back on “poor equity performance, particularly in Japan, China and India.”

The combined loss of wealth in dollar terms was also highest in Asia, with Hong Kong, mainland China, and Japan the hardest hit. Last year, Asia’s ultra-wealthy lost 6.8% of their $6.7 trillion net worth, claims the Singaporean research outfit.

Here in the U.S., meanwhile, we saw the highest real growth in UHNW population, with 2,250 more individuals entering this elite bracket. The combined wealth of the group in the U.S. grew by $265 billion, to a total of nearly $8.3 trillion.

The report underscores what smart folk have been telling Penta this last year – for all the U.S.’s problems, we are still relatively much better off than most nations, including China, where huge problems persist.

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There are 5 comments

JANUARY 5, 2013 11:20 A.M.

Mark Simon wrote:

Penta is becoming a boring cheerleader. You seriously hang your hat on a report by a company called Wealth-X?

Completely disappointed in such lousy judgement. Mark Simon, Next Media

JANUARY 5, 2013 7:52 P.M.

TiredOfFlippingTheBill wrote:

What about information from Cap Gemini/Merrill Lynch?

JANUARY 6, 2013 9:49 A.M.

Adrian Jenkinson wrote:

Thank you for your comments. Wealth-X is the sole provider of detailed insights about the ultra-wealthy that is not based on inferred macroeconomic data. All Wealth-X content is based on extensive original source research, unlike all of the market sizing studies. Adrian Jenkinson, Vice President, Wealth-X.

JANUARY 6, 2013 7:07 P.M.

H. Craig Bradley wrote:

WHY "THE RICH ARE NOT LIKE YOU AND ME", F. Scott Fitzgerald, "The Great Gatsby".

These people are by definition the top 1% or the true "rich". They are like ghosts, you probably will never see one in public in your entire life! As such, they have many investment options not available to the other 99%. They are not trapped in dollar- denominated U.S. investments. One option for them is to move assets overseas and further reduce their tax exposure through obtaining a non-U.S. citizenship. Voting with your feet is a very effective tax avoidance practice and one of the oldest, as well.

JANUARY 6, 2013 11:48 P.M.

TiredOfFlippingTheBill wrote:

Adrian -- how about some information on your web site (or somewhere) explaining the process/parameters you use? I could not find anything about how you came up with your numbers.

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About Penta

Written with Barron’s wit and often contrarian perspective, Penta provides the affluent with advice on how to navigate the world of wealth management, how to make savvy acquisitions ranging from vintage watches to second homes, and how to smartly manage family dynamics.

Richard C. Morais, Penta’s editor, was Forbes magazine’s longest serving foreign correspondent, has won multiple Business Journalist Of The Year Awards, and is the author of two novels: The Hundred-Foot Journey and Buddhaland, Brooklyn. Robert Milburn is Penta’s reporter, both online and for the quarterly magazine. He reviews everything from family office regulations to obscure jazz recordings.